Indiana Inheritance Laws

One of the best ways to show your love to your family members is by leaving a legacy. Individuals with small or large amounts of assets can establish a legacy by creating a will. Verbal promises are not enough and may cause misunderstandings among family members. In certain circumstances, heirs may exploit the executor’s condition, which makes it crucial to retain legal counsel even in the presence of a current will. 

The Indiana Court of Appeals ruled in the case of Bergal vs. Bergal, where the testator, Milton Bergal, created a new estate plan after marrying his wife Linda in 2009. The first trust was for Linda’s and the accountant’s benefits, while the second was for his son David’s. However, Milton’s multiple mental health conditions led to the trust being modified, making his wife Linda the primary beneficiary without his lawyer’s knowledge. This ultimately resulted in David’s disinheritance. 

This case stresses the importance of establishing a solid estate plan and executing it properly through legal assistance. By establishing a will, the executor can have peace of mind knowing that their assets, like real estate properties, vehicles, and bank accounts, will be given to their preferred heirs. Moreover, it can help them make sure that their loved ones will be in a good financial situation at the time of their death.

This article will help surviving families or beneficiaries know their rights and whether they are qualified or not to receive their share of inheritance in Indiana.

What Happens if Someone Dies With a Will in Indiana?

If someone dies in Indiana with a will, their personal representative must follow the directions in the will. The will dictates who receives the deceased person's property and assets The appointed representative or trustee must take the following actions:

1. Notify the immediate family, employer, business colleagues, and close friends. The personal representative or executor may advise a family member who is alone to be with someone. They might suffer from trauma or shock because of the death of their loved one.

2. Inform the funeral director and schedule an appointment for funeral arrangements. The personal representative or executor must obtain several copies of the deceased’s death certificate for processing life insurance and for legal purposes.

3. Notify the deceased’s Social Security office to report the individual’s death. The process of obtaining death benefits can be faster if surviving family members go in person to the nearest office. 

4. Report the decedent’s death to the employee benefits office and insurance companies. The personal representative or executor must provide the deceased’s date of death, Social Security number, and reason for death. If the decedent is eligible for Medicare, contact the local program office to process the claim immediately.

5. Notify the Veterans’ Administration if the decedent is a former military service member. Surviving families may receive death benefits.

6. Record all the money they or the immediate family spends. The total amount may be subject to tax returns.

7. Advise family members not to enter into any contracts and avoid spending large amounts of money.

8. Contact the decedent’s attorney immediately because tax returns may be due within nine months of death. During the meeting, the representative and lawyer discuss payable federal and state taxes and review the deceased’s estate planning documents. The lawyer also determines whether it is necessary to open probate.

In Indiana, a probate process happens if the deceased leaves a last will. Most of the time, the executor opens the probate estate by filing the will with the court. Individuals and families must keep in mind that probate is only required if the estate is worth $50,000 or more. A smaller estate does not require administration. 

To open a probate for a large estate, individuals must submit the will reasonably quickly. For smaller estates under a certain value, there is a 45-day waiting period to file paperwork and claim assets.

There are two types of probate administration in Indiana. They are:

• Supervised administration - This usually occurs when there is a dispute over the will or if the estate is bankrupt. The executor must wait for the court’s approval before distributing or selling any property.

• Unsupervised administration - This is the simplest type of probate administration. This happens when beneficiaries agree with the estate decision. 

What is Considered a Valid Will in Indiana?

In Indiana, not all wills are considered valid. Individuals and families must remember that for a will to be valid, the testator must meet certain requirements. These are the following:

• A written will must be signed by the testator and two disinterested witnesses who are 18 years of age or older. The witnesses should not be the beneficiaries.

• The testator must be at least 18 years old and in good mental state when creating a will. They must be aware of what assets will be given and who will receive their estate.

• An electronic document should also be signed by the testator and witnesses.

What Type of Assets Are Not Included in a Probate in Indiana?

Families and individuals should keep in mind that not all assets have to go through probate. Assets under the deceased’s name alone must go through probate. Here are the following assets that are not included in probate:

• Living trust assets.

• Life insurance proceeds.

• Retirement accounts.

• Assets registered in transfer-on-death form.

• Real estate transferred by a transfer-on-death deed.

• Payable-on-death bank accounts.

Contesting a Will

Interested individuals can challenge a will in Indiana. These people include spouses, children, creditors, or anyone with a property right to claim the estate. Most of the time, they are named in a will. To contest a will in the state, there must be legal grounds present, like any of the following:

• Fraud - Beneficiaries or heirs must prove that the testator was tricked into signing their will.

• Improper execution - Beneficiaries or heirs can contest a will if the will was not signed by the witnesses or legal procedures were not followed.

• Lack of testamentary capacity - Beneficiaries or heirs can challenge a will if the testator suffers from mental issues while drafting the will. However, proving this might be difficult. Interested individuals must prove either that the testator was unaware of the contents of their estate or unaware of who their designated beneficiaries were meant to be.

Individuals who want to contest a will must file within three months after the date of the probate order. Once the petition is filed, they must wait several days to file their objection. They are advised to work with a probate attorney to review any affidavits of objection.

What Happens if Someone Dies Without a Will in Indiana?

If someone dies without a will in Indiana, the immediate family members cannot automatically claim the estate of the deceased. They need to follow the state’s intestate succession laws to know who can rightfully inherit the decedent’s assets. Probate assets are only covered by this law. Under intestate succession laws, the court will appoint the executor who will manage the distribution of assets. The following are the roles and responsibilities of the executor:

• They must handle estate matters in a transparent manner.

• They are expected to place the interests of the beneficiaries above their own.

• They must keep beneficiaries informed and complete all the requirements needed by the court.

• They are expected to honestly perform their duties.

• They should create an inventory of all the deceased’s property. 

• They are accountable for filing and paying all state and federal tax returns.

• They must close the estate once all claims and gifts are distributed. They must present a record of every action taken on behalf of the estate.

If the deceased does not leave a will, anyone who is interested in their assets can open a probate estate with the local court. The probate is open where the deceased had lived. Interested individuals must start the probate three years after the person’s death.

Spousal Rights

In the event the decedent did not leave a will upon their death, the spouse can still receive an inheritance. However, the percentage of the estate they can receive depends on the situation. Here are the possible scenarios:

• The spouse can inherit everything if the decedent has no children or parents.

• The spouse can receive half of the intestate property if there are surviving children. This also includes children from the decedent’s previous marriage.

• The spouse can inherit three-quarters of the estate if the deceased has surviving parents.

If the surviving spouse is a second or subsequent partner, they can inherit 25% of the remainder of the value of clients and encumbrances on the real property of the deceased.

Surviving spouses in Indiana follow the common law. Their election must be made within three months after the date of the probate order. The election must be signed and filed in the office of the clerk of the court. However, if the spouse abandons the other, they have no right to take a part of the deceased’s estate. 

Children’s Rights

According to Indiana’s intestate laws, children can also receive an inheritance even if their deceased parent did not leave a will. However, not all children can automatically receive a share of their parent’s estate. 

If the decedent has no surviving spouse, children can inherit everything. Legally adopted children have the same inheritance rights as biological children.

Afterborn or posthumous children will receive an intestate share after their parent’s death.

Stepchildren, foster children, and children placed for adoption will not automatically receive an intestate share.

The inheritance law system for children is quite confusing, which is why families and individuals are encouraged to hire probate lawyers to help them determine how much inheritance they can get from their deceased parent. 

The Rights of Other Surviving Relatives

If the decedent in Indiana does not have a spouse or children, other family members can receive an inheritance share. Here are the following inheritance scenarios for surviving relatives:

Estates With No Heirs

In Indiana, if someone dies without a will and they have no surviving family members or relatives, the state will handle their assets. However, this rarely happens. The state works with financial institutions and property holders to report any unclaimed assets. In Indiana, the applicable dormancy period for unclaimed assets is five to 10 years.

Additionally, even after the State of Indiana has obtained an unclaimed inheritance, an heir or beneficiary may attempt to claim it. They need to search the Indiana Unclaimed website, operated by the Indiana Attorney General’s Office. 

Unique Situations in Indiana Inheritance Law

In Indiana, there are some situations involving intestate succession rules. If the deceased’s relative is not legally in the United States, they can still receive an inheritance share. Posthumous relatives, or those who were born after the executor dies, can still inherit assets as if they were born while the executor was still alive. Moreover, half-relatives like brothers or sisters can still obtain an inheritance share.

Members of the LGBTQ+ community have the same inheritance rights as in opposite-sex marriages. A married same-sex couple in the state can modify their estate plans to ensure their assets will be given to their surviving spouse. The surviving spouse can also receive retirement plan benefits, workers’ compensation, and the wages of their deceased partner. 

Additionally, the decedent’s retirement account can be rolled over to the surviving partner’s retirement account. They do not have to pay minimum or lump-sum distributions. Same-sex couples are also advised to have a power of attorney to allow their partners to make financial decisions in the event the other one becomes incapacitated.

Does Indiana Impose Inheritance and Estate Taxes?

No, Indiana does not impose inheritance and estate taxes. Individuals and families in the state do not have to settle inheritance tax if they received the inheritance from the deceased after December 31, 2012. Moreover, they do not have to file an inheritance tax return if the deceased died before January 31, 2012. 

The state is one of 38 states that does not have an estate tax. However, if the heirs or beneficiaries obtained assets that amounted to a certain threshold, they might pay estate taxes. The estate tax depends on the municipality and is calculated depending on the total value of the assets. 

To reduce estate taxes in Indiana, families and individuals must establish a trust. The following are the commonly used trusts:

• Charitable Lead Annuity.

• Dynasty.

• Grantor Retained Annuity.

• Spousal Lifetime Access.

They can also invest in life issuance, gift assets before death, and use marital deductions to lower estate taxes.

Legal Resources Related to Inheritance Law in Indiana

While family members or heirs may already know the complexities of inheritance law in Indiana, how to identify a will, and who are the eligible beneficiaries, they might still consider looking for legal help from several organizations in the state.

Indiana 4-H Foundation

The Indiana 4-H Foundation promotes public awareness among individuals and communities in the state. It helps people handle their estate plans and make a gift in their wills. The organization enables clients to leave a legacy by encouraging them to make a gift of real estate. 

Aside from handling real estate cases, it offers programs that cover different areas, such as life science, animal science and agriculture, robotics and technology, environmental science and natural resources, applied mathematics, and engineering.

Charitable Gift Planners of Northeast Indiana

Charitable Gift Planners of Northeast Indiana is a nonprofit organization that has been in service for more than 25 years. Its charitable gift planning professionals promote plan giving and education and professional expertise of council members. The firm’s attorneys, trust administrators, investment and insurance specialists, and estate and financial planners cater to clients in the health, religious, and academic sectors. CGPNI is a member council of the National Association of Charitable Gift Planners.

Indiana Legal Services, Inc.

Indiana Legal Services, Inc., is a nonprofit law firm that offers free civil legal assistance to qualified individuals in the state. It helps residents address legal issues involving government benefits, family law, and healthcare. The organization has more than 100 attorneys and staff members working around the state. Established in 2022, Indiana Legal Services has catered to more than 15,000 low-income individuals.

Indiana State Bar Association

The Indiana State Bar Association provides services to residents seeking legal assistance. It partners with the Public Benefit Corporation and CloudLaw to help families and individuals contact a lawyer who is licensed to practice in the state. The organization consists of judges, lawyers, paralegals, court administrators, and law students. It has been delivering legal services in Indiana for more than 35 years.